Cocoa From Nigeria

On Jul 21, 2012, at 11:41 AM, a.s wrote:

For the exercise, I did a data search on raw cocoa powder and discovered that over 50% is imported from the Netherlands. with the next source accounting for roughly 12% from Malaysia. This is a surprise to me because I am sure the Netherlands does not grow cocoa, and considering their average selling price is slightly higher than the world's average. So why is the Netherlands so dominant, I ask? Is their process is that much better than the others?

Yes, that is why we get the facts, they are often surprising.  You wanted to import from Nigeria, and you find out the product you want to trade in comes from the Netherlands.  The cocoa beans come from central Africa, but that is not what anyone wants.  They want the powder, and after it is processed by the best place in the world, the Netherlands.  Since the processing is the chief value of the product, that is the "source."  And apparently, Malaysia is another source.  My guess is Malaysia both grows the beans and processes it into powder.

As to specifically why, there the research as part of this week's lesson, should tell you why.  If nothing else, you have a question to ask your competitors and customers:  how come?

One part is the numbers you are processing right now, the other is the research steps where you google and go to the library to read trade journals etc on cocoa...  you'll find stories on "how come Netherlands.."

Also, talking to customers and competitors will tell you much...

You do understand this is not accidental...  it is western capitalism to take the raw materials form Africa and perform the added-value elsewhere.  China is giving Africans a better deal than that, so Africa is turning to China as a trade partner.  Bill Gates famously said poor people cannot afford his products.  Of course, because USA management is so expensive.  Poor people all over the world can afford Chinese products.  Countries with poor people have cheap labor too, cheaper than China.  Because Chinese has cheap management, they can supply poor countries.  Communist China is clearly doing more to lift mankind out of poverty than all of the programs extended by capitalist countries, only because China is using free market means to do so.

On Jul 21, 2012, at 12:44 PM, a.s wrote:

I do understand it is not accidental. In fact that is the trigger/impetus for my interest in trying to import from Nigeria. Now more than ever, raw materials are being processed locally for export. We need to to bypass places like the Netherlands. My challenge is trying to find where the customers are.

I disagree with the challenge.  The customers are very easy to find.  You can find a list of cocoa buyers online. The problem is getting the product right so they buy from Nigeria instead of Netherlands.  Not only do the powers that be make sure Netherlands gets the business, they make sure Nigeria does not get the freedom to have reliable infrastructure in order to get the business.

Practically ever week an American citizen gets and email from a Nigerian offering to share a hundred million somehow unethically obtained.  No one believes it, but it hurts Nigeria's reputation.

AS an importer, the customers in USA will be buying from you, not Nigeria.  No one will care if it is from Nigeria or Netherlands.  But if the quality is even slightly off, you will not recover.  Getting Nigeria to make consistently  the first rate quality will be your toughest, biggest challenge.  If you try to make same quality lower price, or lower quality lower price, you will fail.

Here again, by selling an end-user product, designed by you for USA market, you will be defining quality and product with your customers, and establishing that level anew.  The quantities will be very small, so the profits wider and you can absorb mistakes.

Trying to deal in commodity grade consistent standard product from Nigeria is to almost guarantee you will soon enough get an off quality shipment that will destroy your business and reputation. It takes generations to get to Netherlands quality, and Niger has been denied that oppty for generations.

Plan B has so many problems... Plan A I think is better for you.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post